When You Have To Fire An Employee
Unfortunately, it doesn’t always work out and the staffer you thought to be perfect for your team winds up bringing down your practice in some significant way. It is when you recognize that you must fire the employee that the real work of managing your office truly begins. Indeed, with the increasingly litigious nature of our era, firing staffers has become a problematic process, fraught with many legal and ethical landmines. “We all know how to terminate someone,” notes Hal Ornstein, DPM, who has a private practice in Howell, N.J. “It’s not hard to say ‘You’re fired.’ The idea is to protect yourself legally, to have all your ducks in order, to protect your practice against havoc.” If you think this “havoc” can never happen to you, think again. Here are just a few statistics on employment-related lawsuits from the Employer Advisor’s Network: • More than 450 employment lawsuits are filed in the United States every day. • The average annual caseload for Equal Employment Opportunity Commission (EEOC) investigators has tripled since 1992. The organization currently has an 18-month backlog for resolution of discrimination cases. • The average case takes two years to go to trial and may end up on appeal for longer than that. • Of all cases tried, 56 percent result in verdicts for the plaintiff (employee). The average plaintiff’s verdict in employment law cases exceeds $250,000, with 15 percent of all verdicts exceeding $1 million. • Eighty percent of all employers that were sued felt they were the victims of unfair or frivolous lawsuits. Half of those employers sued spent in excess of $50,000, and one-third spent more than $100,000 defending against these claim, in addition to the cost of settlement or verdict. Medical professionals, however, are open to additional problems. “A disgruntled employee can do more damage to you and your practice than employees in other fields can do to their employers,” notes Michael Metzger, DPM, MBA, a podiatric consultant in Dallas, Texas. “They could call Medicare with a complaint, that you’re over-billing or under-billing, or they could file an OSHA complaint. They could call a disgruntled patient and make problems for you there too. You have a liability in the medical profession that you don’t have in other situations.” It’s Easy And Cheap To Lodge A Complaint The threats of lawsuits abound. After all, in most states, they are easy to lodge, regardless of claim. “There used to be a big ad slogan in New York for the lottery—‘A Dollar and a Dream,’” says Janice Roven, JD, a New York-based attorney. “My philosophy on this type of litigation is ’75 Dollars and a Dream.’ In New York, it costs $75 to start a lawsuit about anything, whether it’s discrimination based on gender or on harassment. There are so many cases out there that are frivolous.” Roven notes that it is difficult to give doctors instructions on how to avoid being sued by an ex-employee, because of the ease with which people can start cases. What they must do is learn how to minimize the damage incurred by a lawsuit. “I just read about a case involving a female secretary who sued her female boss for sexual harassment, because the boss bought her yogurt, asked her on a variety of occasions what the employee was doing for the weekend, and ‘sat close to her’ when no one else was around,” offers Roven. “The court held that the plaintiff did not have sufficient evidence of sexual harassment. But meanwhile, this person is in a lawsuit.” Dr. Metzger concurs. “Lawyers are going to jump at what they’re going to jump at. Even if you win, your legal fees will cost you thousands.” What You Should Know About Protected Classes And At-Will Employment You cannot, for example, fire an employee based on their gender, race, disability, age or national origin. These are the so-called “protected classes” covered under various acts and titles of federal and state employment laws. However, all states (with the exception of Montana) observe the rule of at-will employment, that an employee is hired at-will and that employment can be terminated at the will of either party. This means that your practice has the right to terminate your relationship with an employee at any time without cause, and your employee has the right to leave at any time. Where your practice can run into problems is when a terminated employee claims to have been fired for one of the “protected class” reasons, or for an alleged incident or incidents related to those reasons, such as sexual harassment, unequal treatment, age discrimination and so forth. Regardless of the at-will status of your employer/employee relationship, you should have a reason when terminating a staffer. Among the most commonly acceptable reasons for termination include: • Incompetence. The employee is simply incapable of performing his or her duties, even after numerous second or third chances. • Illegal behavior. The employee violates the local, state or federal laws. This includes theft, acts of physical violence and other common criminal offenses. • Tardiness or absenteeism. The employee consistently shows up to work late or not at all. • Alcohol or drug-related infractions. The employee comes into work drunk, high or otherwise intoxicated. Proactive Protection: Why Training And Documentation Are Essential Of course, terminating a staffer for one of these reasons does not automatically exclude you from being sued. Remember, you can be sued regardless of the claim or the merit thereof. Here are some ways to protect yourself in order to minimize the damage done to you, your practice and your remaining staff. • Training. New employees simply need to be shown the ropes of how they do their jobs, as well as what rules they must follow in the course of their employment with your practice. “Training is key,” explains Dr. Ornstein, the President of the American Academy of Podiatric Practice Management. “Part of training is the communication of expectations right when a new employee comes in. I find that most doctors do not train their staffs properly. In a small office, if you have three people and one leaves, the remaining two tend to be far too busy to train a new employee. This is a cardinal mistake. You need to do whatever you must to get these people trained, even if it means bringing in an outside service.” • Documentation. Documentation is the most potent weapon in your defense against frivolous claims. “If you don’t have everything in writing, you leave yourself wide open for problems,” emphasizes Dr. Ornstein. “To say, ‘Well I told you’ is irrelevant. It means nothing. It has got to be in writing. The gold standard of this documentation is the employee manual. Some small-practice podiatrists might scoff at the idea of writing an employee manual for just two or three employees. “My father was a podiatrist and he had a very small office,” notes Roven. “He didn’t have a non-discrimination policy. He didn’t have a rulebook. It was a very informal situation. A lot of doctors still have that situation.” Still, Roven points out, the written word is a key factor in protecting yourself against lawsuits. “You absolutely must have an office manual,” advises Roven. “Just sit down and do it and then make sure you communicate it to your employees.” (See “Creating An Effective Employee Manual” on page 64.) Have You Been Giving Regular Performance Reviews? • Reviews. Part of your responsibilities as an employer is to give timely feedback on performance so the employee knows what he or she is doing well and what to improve upon, and so repeated problems can be dealt with and documented in a manner that protects you in the event of a lawsuit. “At my office, a new staffer is reviewed within 30 days of starting, then three months later, then every year thereafter,” offers Dr. Ornstein. “I don’t go crazy with that, though, because I review them every day. I tell my employees, ‘If you weren’t good, you wouldn’t be here.’” However, the idea of formal reviews is often overlooked in small practices. “Unfortunately, when I had my practice, I never did a whole lot of formal reviews,” admits Dr. Metzger. “Once a year, I’d take an employee out to lunch and we’d talk. Doctors with small offices tend to run their office like a family. You just sit down and talk with them about how they’re doing, how you’re doing and so forth. It’s much more personal than you would have in a bigger practice. It’s probably a bad way to run a business in some respects. You have the tendency to not give the employee the kind of feedback she or he needs.” Roven stresses, once again, the need for documentation in performance reviews. “Let’s say you’re unhappy with their performance,” she says. “Write it up on a form—an employee documentation record. Make sure it contains the date, the employee’s name and the violation (tardiness, absenteeism, conduct, substandard work, insubordination, carelessness, safety and so forth). There should also be a place for the doctor to write remarks and a place for employee comment and signature.” What About Your Disciplinary Process? • Process for discipline. One way to defend yourself from claims of unfair employment practices is to enforce a consistent disciplinary process in the event an employee violates some rule or rules of your practice. “You need to make it clear in your office manual what the process is,” says Roven. “If you start this formal process, though, you need to be consistent with it. Playing favorites can get you into trouble.” Roven gives an example. “Say you allow your favorite employee—a white nurse—to get away with being late, but you don’t let another employee—a black nurse—get away with it. Now maybe the white nurse puts in extra effort in other things, so you don’t care that she’s consistently late because she gives back in other ways. No two employees are the same. Some people give back more than what is asked of them. But you now have the black nurse who feels picked on and feels the white nurse is getting preferential treatment. Now she’s got a case that you’re picking on her because she’s black.” Quick Tips On Termination Etiquette If you do wind up terminating a staffer, take the time to do it properly in order to best protect yourself and your practice. “Spell out logically why you’re terminating them,” says Dr. Ornstein. “Don’t sugarcoat it, but tell them the way it is without being derogatory or inflammatory or negative. Another thing to think about is anything you say to them may be used against you, so you should also consider having a witness with you when you terminate the employee. Everything is about protecting yourself. That’s what it’s all about.” Some other things you’ll want to cover (and document) include the following: • Pay. If you’re providing a severance, let the staffer know how much and when he or she will be receiving it. Also, if he or she is to be compensated for unused sick leave or vacation (in accordance with existing practice policies), let the employee know how much and how it will be paid to him or her. •Unemployment. If appropriate, provide any pertinent information on unemployment compensation, including how he or she can collect, where to go and so forth. • Practice property. If the staffer has any property belonging to your practice (keys, a pager or cell phone, etc.), make sure you collect them. • Collecting personal items. If you do not wish to disrupt business by allowing the terminated employee to immediately collect his or her personal items from your office, set up a time in which he or she can come back and do so. Post-Termination Considerations Even after the fired staffer is gone, there are still additional things to consider, each with potential legal consequences. • References. If your practice does not have a policy on providing references for former employees, now is the time to consider drafting such rules. There are, of course, different ways to handle references, depending upon the circumstances of the termination and how specific and formal you want to be when responding to any inquiries from other potential employers. Dr. Ornstein takes the tactic of full disclosure. “If someone stole from me, I’m going to tell whoever calls that they stole from me,” he says. “If there were personality conflicts between some employees and the person wasn’t a bad person, I’ll sugarcoat it. It really depends on the individual.” Roven, on the other hand, argues for the “less is best” approach. “I would be very leery of giving a bad reference,” she explains. “Most places give references in vague terms, giving specifics only in terms of the salary the person was making. Then they’re off the hook. The best way to get out of giving references is to have a policy in place to only provide that information, and to tell inquiring employers that your personnel files only consist of salary information.” • Records. Most states side with employers when it comes to granting fired employees access to their personnel records. “You’re not obligated to provide the fired employee with an account of his or her personnel records, unless you’re in litigation,” points out Roven. “Once you’re in litigation, though, be very careful about how you handle those records. Don’t destroy anything and don’t change it either. Once you start documenting, you need to do it well and be vigilant and consistent with it. Don’t do it haphazardly because that also could get you into trouble.” What Should You Tell Your Remaining Staff? Your main concern in the wake of a termination, after protecting yourself, is determining how will the termination will affect the rest of your staff. Again, there are different approaches. “In my practice, I would sit down with my staff after the termination and give them details and a logical explanation as to why I let this person go,” says Dr. Ornstein. “This works fine for a small practice. At my practice, I can get all three of my office staff together during lunch and say, ‘Let’s talk about this.’ The idea that ‘the vaguer you are, the better’ works in a big practice, but in a small practice environment, the specifics are important. You need to create peace in your office when someone goes, and keep up the level of efficiency you need to take care of your business and your patients. While Roven feels that saying “less is definitely best,” she admits the dynamics in smaller practices might dictate a different approach. “Every situation is different and every situation is delicate,” offers Roven. “I have a friend who manages several hundred employees and she refuses to state why a person is fired, which makes sense. On the other hand, though, it doesn’t give anyone anything to learn from. If it’s a small place, the people around will know what’s going on. They’ll know who’s a good worker and who’s not, who they can rely on and who they can’t. But if the fired employee wants to sue you, they can go after you for libel or slander if you tell people too much.” Mr. Smith is a freelance writer who lives in Cleona, Pa.